BRIAN KANTOR: The misery of expensive national debt
SA has been on this spendthrift path, without pause, ever since the global financial crisis
Micawber’s principles apply to national as well as household budgets. Expenditure less than revenue means happiness. Expenditure that consistently exceeds income brings misery in the form of ever-rising and more expensive levels of debt, the service of which takes an ever-larger share of revenue collected, and of all expenditure. Paying interest and repaying capital maintains your credit rating — more or less — even if it doesn't buy votes.
SA has been on this spendthrift path, without pause, ever since the global financial crisis. From fiscal 2008/2009 to date, real government expenditure has grown by an average of 3.2% per annum. Government revenues have lagged, growing by an average of 2% per annum after inflation. Those extra 1.2 points of spending make a big difference to debt levels over time. Real GDP has grown by an immiserating average of 1.2% per annum since 2009...
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